T-Mobile's aggressive tactics to lure mobile phone customers away from its rivals appears to be working.
The Seattle wireless carrier on Thursday announced that it signed up 1.3 million postpaid customers in the first quarter. That's more new customers than AT&T, Sprint and Verizon combined to attract during the same period.
The accomplishment is validation for Chief Executive John Legere, who has drastically changed how T-Mobile delivers services since assuming his post last year.
T-Mobile has stopped requiring customers to sign service contracts, launched free wireless plans for tablet owners and rolled out a program that allows customers to upgrade their devices every few months rather than the industry norm of every two years. T-Mobile's rivals have mimicked many of these strategies.
“A year ago I promised that we would bring change to what I called this arrogant U.S. wireless industry," Legere said in a statement. "We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited."
In perhaps its boldest move, T-Mobile earlier this year also began offering to pay the early termination fees for AT&T, Verizon and Sprint customers who switched to its service.
That strategy appears to have paid off, with T-Mobile now serving 49.1 million customers, up 44% from 34 million at this time last year. The company's revenue also saw strong growth, increasing 47% from a year earlier to $6.9 billion.
However, T-Mobile was not able to turn a profit. The carrier said it suffered a loss of $151 million in the three-month period ended March 31, compared with a $107-million profit for the same period a year ago.
That means that while T-Mobile is seeing rapid growth, strategies like its early termination fee program are probably not sustainable in the long run. Eventually T-Mobile will have to end those programs and find ways to keep customers and lure new ones without the help of outlandish promotions.
T-Mobile stock closed up $2.36, about 8.1%, at $31.65 a share.Copyright © 2014, Los Angeles Times